Where is an Oil Shock?

Federal Reserve Board of St. Louis Working Paper No. 2011-016B

30 Pages Posted: 15 Jun 2011 Last revised: 21 Mar 2014

See all articles by Kristie Engemann

Kristie Engemann

Federal Reserve Bank of St. Louis

Michael Owyang

Federal Reserve Bank of St. Louis - Research Division

Howard J. Wall

Lindenwood University - Center for Economics and the Environment

Multiple version iconThere are 2 versions of this paper

Date Written: June 1, 2011

Abstract

Much of the literature examining the effects of oil shocks asks the question - “What is an oil shock?” and has concluded that oil-price increases are asymmetric in their effects on the US economy. That is, sharp increases in oil prices affect economic activity adversely, but sharp decreases in oil prices have no effect. We reconsider the directional symmetry of oil-price shocks by addressing the question - "Where is an oil shock?", the answer to which reveals a great deal of spatial/directional asymmetry across states. Although most states have typical responses to oil-price shocks - they are affected by positive shocks only - the rest experience either negative shocks only (5 states), both positive and negative shocks (5 states), or neither shock (5 states).

Keywords: State-Level Oil Shocks

JEL Classification: C31, E37, R12

Suggested Citation

Engemann, Kristie and Owyang, Michael T. and Wall, Howard J., Where is an Oil Shock? (June 1, 2011). Federal Reserve Board of St. Louis Working Paper No. 2011-016B, Available at SSRN: https://ssrn.com/abstract=1864716 or http://dx.doi.org/10.2139/ssrn.1864716

Kristie Engemann

Federal Reserve Bank of St. Louis ( email )

411 Locust St
Saint Louis, MO 63011
United States

Michael T. Owyang (Contact Author)

Federal Reserve Bank of St. Louis - Research Division ( email )

411 Locust St
Saint Louis, MO 63011
United States

Howard J. Wall

Lindenwood University - Center for Economics and the Environment ( email )

209 S. Kingshighway
St. Charles, MO 63301
United States

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